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Ask Ariel: Why do watch brands have such a contentious relationship with marketing?

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In this series of guest columns, Ariel Adams, owner and editor-in-chief for aBlogtoWatch, answers questions on behalf of WatchPro readers. Click here to Ask Ariel anything you like!

Ariel replies: As someone who has become a trustworthy marketing expert in the watch industry, I frequently find myself in a culture that tends to have animosity toward marketing. Let me say now that, by all accords, the luxury watch industry relies exclusively on marketing to generate demand for and sales of its products. The wristwatch industry today would be a bunch of people working out of glorified garages if it were not for a marketing plan that recommends the idea to the world that wearing an expensive watch makes you look more dignified and desirable to interact with.

So what is this animosity toward marketing all about? Let me share with you a few paraphrased statements I have repeatedly heard over the years: “We are not a marketing brand.” “Don’t you think advertising makes us look desperate?” “We don’t need to advertise or communicate — our customers know where to find us.” “We rely on our retailers to create demand for us in their markets and to develop a customer base there.” “We do market — I post on our Instagram page and Facebook all the time!”

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The above sentiments can be boiled down to a misunderstanding of the resources necessary to have a real marketing presence, accompanied by an unwillingness to invest the necessary resources to build such a presence. In my years working closely with watch brands, I have come to sympathize with some of the business challenges many of them face in a rapidly consolidating environment, such as having to take on more responsibility in-house. The responsibility of marketing has never traditionally been something that timepiece manufacturers in Switzerland have had to contend with. These companies simply produced watches and shipped them. In many instances, they didn’t even design watches — as that was up to another company or office. Marketing as a business need was a function handled outside the company, and mostly outside the country.

Watch product distributors around the world mostly paid for and developed marketing of the brands they shipped in their regions or countries. That means that someone importing Swiss watches for retail sale in Spain would also often invest in marketing those watches in the Spanish market in a variety of ways. The distributor or retailer felt confident in this investment because of the very real territorial exclusivity they had in the region — meaning that for every watch they are able to generate a sale for in Spain through marketing, they are able to benefit when the consumer purchases that product anywhere in the country. And then the Internet happened.

Suddenly, watch distribution regional exclusivity started to erode because watches were being shipped all over the place — mostly to avoid taxes and to enjoy favorable currency exchanges. The notion of investing in your market because you enjoyed the fruits of product demand in your market quickly started to lose luster because consumers you trained to watch a product could go buy it elsewhere for cheaper.

At the same, time watch brands being consumed by corporate owners began to end historic relationships with regional distributors, replacing third-party-owned distributors with wholly-owned subsidiaries managed out of headquarters. The idea was for watch makers to enjoy additional profits because they needed to share less of the sales price margins. The problem, however, was that much of the time, these new subsidiary companies were not given the resources to invest in marketing in the same way the regional distributor once had. The subsidiaries also happened to be run not by locals who understand regional marketing preferences and nuances, but head-office appointees who, instead, had orders to ensure marketing was streamlined across the world (for better or worse). Effective watch-industry marketing died along with the end of wholly independent distributors that cared for their own markets.

Today we see a small resurgence in watch industry marketing prowess as exhibited mainly by the smaller, independently run brands. In other words, we see marketing innovation from the entrepreneurs and hungry folks. Those with something to prove and only a short amount of time (and can afford to attempt it) are those who are willing to take some risks in marketing luxury watches (again, for better or worse). There is not, however, any large professional entity (so far) really modernizing when it comes to sustainable messaging to consumers that buying a luxury timepiece will make them happy, and why.

To introduce the ways in which many watch-brand teams get marketing wrong, I try to remind them that “marketing” is really the same as “communication.” A brand that does not invest in marketing does not make an effort to communicate what it does to consumers. The unfortunate reality in our consumer-driven economy today is that marketing, in some sectors, has been so successful that consumers almost never lack suggestions for what to buy. Consumers today have comparatively little disposable income and far too many pushy suggestions for how to spend it. If you are a company trying to sell something in the 21st century, you can’t just be speaking to consumers, you have to be doing it rather loudly.

Another area in which I sympathize with many of today’s watch brands, when it comes to marketing, is that most of them are being asked to create a marketing department without hiring a marketing department. As I explained above, marketing as a function is not something the Swiss watch industry has any historical relationship with. They are engineers and machinists and spend their time thinking about efficient ways to make metal look beautiful. They are not spending their days considering the greater questions about what urbanites in far away cities need on their wrists in order to feel as though they are gracefully aging into their 40s. This type of inquiry is entirely unrelated to the process of making watches and is not part of traditional watchmaking culture.

It makes sense, then, that a past-looking “traditional” industry mostly interested in how companies operated in their “glorious heyday” eschewed marketing departments. Realistically, though, watch brands do need marketing departments, and they can’t simply pull on resources from the administration or design department to do it. In my experience, the biggest thing going against luxury watch brands today is that they mistakenly believe they have the personnel to handle marketing when they don’t.

Good marketing requires a department;  it isn’t a box to check off on a list when trying to make sure you’ve covered all your bases. Marketing is the arm of a company designed to share what the company is doing with the rest of the world. This is unrelated to manufacturing, design, customer service, sales, logistics, and administration. Marketing, in other words, is an entirely new expense that watch brands thriving tomorrow will have to seriously invest in. Hey, even Rolex does.

Rolex markets more than any other watch brand. People have often asked me, “What is Rolex’s secret?” And I simply say, “They spend money.” You can’t get rich without spreading the wealth in this industry, apparently, but many seem to think they can get rich quick through marketing schemes and consumer manipulation. Any marketing strategy not based on integrity and honesty will blow up in any luxury brand’s face, sooner or later.

How serious is the watch industry’s marketing problem? In a recent study of watch-brand marketing weakness, I came to the probable conclusion that without Rolex’s marketing investments around the world to promote the notion of a “luxury watch as success symbol,” the entire watch industry would fall flat on its face. It isn’t that Rolex was doing something markedly better than others in terms of messaging quality or strategy. It is that Rolex was simply spending the necessary resources on it and, in many instances, probably spending far more than necessary (but isn’t that the point of being able to splurge a little?). Rolex is carrying more than its fair share of the responsibility of making the desire for luxury watches these days “a thing.”

Rolex can also be admired by leading through example in a way that most penny-pinching companies with $100,000 timepieces would embarrassingly shy away from. My point isn’t to shame brands that don’t invest in marketing, but rather to highlight the simple fact that these brands expect people to spend money on them — but they don’t spend money on others. This mentality is systemic on the manufacturing side of the watch industry, and it is irresponsible to allow it to make decisions about how a company should invest in marketing. A marketing executive should never (ever) tell an engineer how to machine a beautiful wristwatch, and a machine shop operator keen on efficiency and cold logic should never (ever) dictate to a marketing department how to stir up emotion in end-consumers.

Too often, I hear managers at a lot of today’s finest watch brands say things like, “We should really do some marketing this year,” only to have the entire year go by with their time being allocated by other important responsibilities. There is an increasing awareness in the Swiss watch industry that they are getting something about marketing really wrong or simply not doing enough. That isn’t, however, being immediately paired with a solution to the problem.

Having effective marketing means having an actual marketing team — that is the lesson I have come to learn and one that I hope I am sharing with people today. Teams require resources, so the reality is that marketing isn’t just about people, it is also about carving out a brand new budget for it.

Allow me to end this discussion with the beginning of what is probably another discussion. How does a brand budget for marketing and how much should they be spending? The first part of the answer to this question is to acknowledge the fact that, while you can measure the effectiveness of some marketing, much of it will be unmeasurable in pragmatic terms. Data worshippers will cringe, but the short story is that there is no efficient means I have discovered to evaluate the effectiveness of most watch-brand advertising spending. There are plenty of false-indicator data out there that looks compelling, but the reality is that measuring the effectiveness of advertising spending is still a human effort, not a machine effort.

I recommend that watch brands allocate at least 15-20% of revenue consistently back into marketing. New marketing strategies should always be experimented with, but managers will be utterly wasting their time if they focus too much on trying to justify marketing spending. The culture of justifying spending is not only entirely deleterious to morale, but it is antithetical to the needs of marketing where initiatives build on one another over time and tend to influence consumers in unpredictable ways. Just as the design of a beautiful timepiece cannot today be accomplished or predicted by a machine, so is the nature of effective marketing. Doing it well requires confident, ongoing spending, and the good taste to know when a message and its audience is right for your product.

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Ariel Adams

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